Palestine Ranked 143rd out of 189 Economies in the 2015 Doing Business by the World Bank

Recently the World Bank released the 12th annual Doing Business report, for the year 2015, which places Palestine as the 143rd among 189 economies from around the globe. The Doing Business series measures to what extent regulations enhance and to what extent they restrict business activities in a particular economy and in comparison with other economies. The 2015 report sets the beginning of a two-year process that aims to reform the methodology for measuring the indicators in eight out of the ten sets in Doing Business. The most significant difference in the new process is that from 2015 on Doing Business computes the ease of doing business ranking on the basis of an economy’s distance to frontier (DTF) scores, first measured in the 2012 report, showing the absolute distance to the best performance globally in each of the ten doing business indicators (the labor market regulation topic is excluded). Then, economies get ranked on the basis of their performance in comparison with the performance of other economies.

Palestine’s relative ranking in 2015 marks a decline of four positions (from 139th) from the previous year although its absolute score (DTF) increased marginally from 53.00 in 2014 to 53.62 in 2015, where 0 represents the worst performance and 100 represents the frontier.

With respect to comparator economies, Palestine performed worse than the average for the MENA region, which scored a DTF of 59.23 for a ranking of 106. In specific, Palestine outperformed Libya (33.35, 188th) and Syria (46.51, 175th) but remained behind Jordan (58.40, 117th), Egypt (59.52, 112th), Lebanon (60.61, 104th), and Turkey (68.66, 55th).

The table below shows Palestine’s performance in 2014 and 2015 in each of the ten indicators, according to its relative ranking and absolute score.

Table: Comparison between Palestine’s Ranking and DTF Scores in 2014 and 2015

Indicator

Ranking in 2014

Ranking in 2015

DTF Score in 2014

DTF Score in 2015

Ease of Doing Business

139

143

53.00

53.62

Starting a Business

155

162

66.37

66.53

Dealing with Construction Permits

169

173

48.89

48.62

Getting Electricity

74

83

76.31

76.26

Registering Property

98

99

65.08

65.08

Getting Credit

111

116

35.00

35.00

Protecting Minority Investors

130

141

43.33

43.33

Paying Taxes

79

51

73.77

80.29

Trading across Borders

123

130

64.59

64.43

Enforcing Contracts

104

105

56.65

56.65

Resolving Insolvency

189

189

0

0

Source: Doing Business

As the table above demonstrates, in the 2015 report the Palestinian economy acquired the highest DTF scores and rankings in paying taxes (80.29) and getting electricity (76.26), similar to 2014. Meanwhile, Palestine performed poorly in resolving insolvency for which it received a score of 0 because in each of the previous five years there were no cases involving a judicial reorganization, judicial liquidation, or debt enforcement procedure according to Doing Business.